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How brands will use the Internet of Things to develop their customer relationships: Forrester

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The Internet of Things (IoT) will soon become a significant channel through which brands will be able to create and deepen relationships with their customers, a new Forrester report suggests.

Tens of billions of IoT sensors will appear, embedded in connected objects such as the pictured Miele oven, connected using Microsoft technoloy, in the next five to 10 years, predicts the report, The Internet of Things redefines brand engagement.

As a result, it says, marketers will need to develop experiences rather than managing products – a process to which mobile phones will be key.

“Reports of IoT killing mobile are greatly exaggerated, if not completely inaccurate,” said report author and Forrester analyst Thomas Husson. “Instead, brands need to define engagement scenarios where smartphones are the primary interface and remote control of connected experiences.”

Forrester predicts that this year, a third of US online adults will use some form of IoT whether at home, through wearables or in their car. But adoption of connected devices in smart homes or cars is still low, especially in Europe. The findings show that as yet only 4% of UK online adults use their mobile or tablet to control or monitor home utilities or appliances.

As yet, IoT-based marketing to consumers is still limited, but Husson suggests in the report that this industry will eanble marketers to listen to consumers and analyse their real behaviours, interact with consumers more frequently and in a more intimate way, as well as differentiating their customer experiences. They will also be able to build new offerings and business models.

The key to doing that, argues Husson, is by delivering utility through the IoT – and marketers must improve their skills before they can do that. That includes the challenges of using data to put customer behaviour in context and keep control of the customer relationship. Privacy and security must be a differentiator, while design thinking will help marketers to move from products to experiences.

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